USA-New York


Henry Hudson's 1609 voyage marked the beginning of European involvement with the area of New York. Sailing for the Dutch East India Company and looking for a passage to Asia, he entered the Upper New York Bay on September 11 of that year. After his return word of his findings quickly spread and Dutch merchants began to explore the coast in search for profitable fur trade. During the 17th century, Dutch trading posts established for the trade of pelts from the Lenape, Iroquois, and other indigenous peoples expanded into the colony of New Netherland. The first of these trading posts were Fort Nassau; Fort Orange, developing into settlement Beverwijck (1647), and into what became Albany; Fort Amsterdam; and Esopus. The English captured the colony during the Second Anglo-Dutch War and governed it as the Province of New York. The city of New York was recaptured by the Dutch once again in 1673 during the Third Anglo-Dutch War (1672–1674) and renamed New Orange, but returned to the English under the terms of the Treaty of Westminster a year later. New York endorsed the Declaration of Independence on July 9, 1776. The New York State constitution was framed by a convention which assembled at White Plains on July 10, 1776, and after repeated adjournments and changes of location, terminated its labors at Kingston on Sunday evening, April 20, 1777, when the new constitution drafted by John Jay was adopted with but one dissenting vote. It was not submitted to the people for ratification. New York was the 11th state to ratify the United States Constitution, on July 26, 1788.

Service packages

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Service item Express Standard Optimum
Company registration
Legal address per year
Secretarial services for the first year
Fees and duties for the first year
Apostilled bound set of incorporation documents
Compliance fee
Nominee service per year
Bank Account Pre-approval
Price

2 190 USD

2 190 USD

2 690 USD

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Contact method: and / or

Core Services

2 190 USD

— Incorporation

including incorporation tax, state registry fee, including Compliance fee

— Annual government fees

Stamp Duty and State Division of Corporations incorporation fee

1 710 USD

— Corporate legal services

including registered address and registered agent, NOT including Compliance fee

125 USD

—Delivery of documents by courier mail

DHL or TNT, at cost of a Courier Service

675 USD

— Apostilled set of Statutory documents

Related services

Tax Certificate

Company’s tax residence certificate for access to double tax treaties network

675 USD

Certificate of Good Standing

Document issued by a state agency in some countries (Registrar of companies) to confirm a current status of a body corporate. A company with such certificate is proved to be active and operating.

Compliance fee

Compliance fee is payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)

250 USD

Basic

simple company structure with only 1 physical person

50 USD

For legal entity in structure under GSL administration

additional compliance fee for legal entity in structure under GSL administration (per 1 entity)

100 USD

For legal entity in structure not under GSL administration

additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)

250 USD

For client with high risk Status

Cost of incorporation, including first year servicing 2190
Cost of annual service, starting from the second year 1710
Open account in 30478
Incorporation timescale for a turnkey company 2 weeks
Country 26746

General information shortly

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Total area Population Capital Unemployment Corruption perceptions index rank
54.556 sq. km 19.651.127 (2013) Albany 6% (2014) 19 (2013, USA)
Location Northeastern and Mid-Atlantic regions of the United States
National currency US dollar
Conditional reduction of currency USD
Against USD 1
Climate, average max and min t° humid continental; winters are long and cold with a temperature of −25 °C in the northern highlands and −15°C in the southwestern and east-central highlands; summer temperatures range from 25 to 30°C
Time difference from Moscow - 8 hours
Dialing code +1-347
State language English
Ethnic groups White 79.96%, black 12.85%, Asian 4.43%, Amerindian and Alaska native 0.97%, native Hawaiian and other Pacific islander 0.18%, two or more races 1.61%
Literacy rate 99%
Credit rating AA
Government type state of the USA
Executive branch Governor of New York
Legislative branch the New York State Senate and the New York State Assembly
Judicial branch Court of Appeals, Supreme Court and county courts
GDP per capita rank 6 (2013, USA)

Corporate info

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Shelf companies permitted Legal system Incorporation timescale for a turnkey company Cyrillic alphabet permitted in company name Local registered office
No common law 2 weeks No Yes
Types of entity Business Corporation; Not-for-Profit Corporation; Limited Liability Company; General Partnership; Limited Partnership; Sole Proprietorship
Incorporation timescale for a new company 7 days
Company suffix "Limited Liability Company" or the suffixes "LLC" or "L.L.C."
Sensitive words board of trade, state police, chamber of commerce, state trooper, community renewal, tenant relocation, corporation, urban development, incorporated, urban relocation, partnership; acceptance, guaranty, annuity, indemnity, assurance, insurance, attorney, investment, bank, lawyer, benefit, loan, bond, mortgage, casualty, savings, doctor, surety, endowment, title, fidelity, trust, finance, underwriter; "blind" или "handicapped"; "exchange"; "school," "education," "elementary," "secondary," "kindergarten," "prekindergarten," "preschool," "nursery school," "museum," "history," "historical," "historical society," "arboretum," "library," "college," "university"; "conservatory," "academy," "institute", etc.
Local registered agent Yes
Information to be kept at the registered office a list of names and mailing address of each manager; a list of the names and mailing address of each member together with the contribution and the share of profits and losses of each member; a copy of the articles of organization; a copy of the operating agreement, a copy of the limited liability company's federal, state and local income tax or information returns and reports for the three most recent fiscal years
Seal required, type of seal not required
Redomiciliation (to, from) permitted not permitted

Director and secretary

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Minimum number of directors Residency requirements for directors Corporate directors permitted Disclosure to local agent Disclosure to public
1 No Yes Yes No
Directors’ meetings/frequency/location No requirements
Company secretary required No
Residency requirements for a secretary No
Qualified secretary required No
Corporate secretary permitted No

Shareholder and beneficiary

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Minimum number of shareholders Residency requirements for shareholders Corporate shareholder permitted Disclosure to local agent Disclosure to public
1 No Yes Yes No
Meetings/frequency/location Yes / annually / no requirements
Beneficiary info disclosure to No

Shares and share capital

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Minimum authorized share capital Minimum issued share capital Minimum paid share capital Authorized capital payment deadlines Bearer shares permitted
No requirements No requirements No requirements No requirements No
Issued capital payment deadlines No requirements
Standard currency US dollar
Standard authorized share capital No
Standard par value of shares No
Shares with no par value permitted No

Taxes

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Min. rate for corporate tax Capital gains tax VAT Withholding tax Exchange control
21% Before 20% ~ 3-10% 30%/30%/30% No
Personal tax 10-37%
Corporate tax (in detail) The federal corporate income tax rate is 21% (Biden plans to raise the rate to 28%).
VAT. Details At the federal level, sales and use tax are not levied. However, such taxes are levied in most states as well as at the municipal level. In New York sales tax applies to retail sales of certain tangible personal property and services.
Other taxes Social contributions, Inheritance and gift taxes, Property taxes
Stamp duty State level

Accounts

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Requirement to file accounts Publicly accessible accounts Audit required Requirement to file Annual Return Publicly accessible Annual Return
Yes No No Yes Yes
Requirement to prepare accounts Yes
Double tax treaties network 60
Tax Exchange Information Agreement network 34
OECD member Yes
Offshore/onshore status according to the RF laws No

GENERAL INFORMATION

General Info

New York is a U.S. state located in the Northeastern and Mid-Atlantic regions of the United States. New York is bordered by New Jersey and Pennsylvania to the south and by Connecticut, Massachusetts, and Vermont to the east.
Total area of the state is 54.556 sq. km. The population is 19.651.127 (2013). Among ethnic groups are White 79.96%, black 12.85%, Asian 4.43%, Amerindian and Alaska native 0.97%, native Hawaiian and other Pacific islander 0.18%, two or more races 1.61%.
The capital is Albany.
The official language is English.
The currency is US dollar (USD).
Climate of New York is humid continental. The winters are long and cold with a temperature of −25 °C in the northern highlands and −15°C in the southwestern and east-central highlands. Summer daytime temperatures usually range from 25 to 30°C.
Time difference with Moscow is - 8 hours.
Literacy rate is 99%.
Calling code is +1-347.

History

Henry Hudson's 1609 voyage marked the beginning of European involvement with the area of New York. Sailing for the Dutch East India Company and looking for a passage to Asia, he entered the Upper New York Bay on September 11 of that year. After his return word of his findings quickly spread and Dutch merchants began to explore the coast in search for profitable fur trade. During the 17th century, Dutch trading posts established for the trade of pelts from the Lenape, Iroquois, and other indigenous peoples expanded into the colony of New Netherland. The first of these trading posts were Fort Nassau; Fort Orange, developing into settlement Beverwijck (1647), and into what became Albany; Fort Amsterdam; and Esopus. The English captured the colony during the Second Anglo-Dutch War and governed it as the Province of New York. The city of New York was recaptured by the Dutch once again in 1673 during the Third Anglo-Dutch War (1672–1674) and renamed New Orange, but returned to the English under the terms of the Treaty of Westminster a year later.
New York endorsed the Declaration of Independence on July 9, 1776. The New York State constitution was framed by a convention which assembled at White Plains on July 10, 1776, and after repeated adjournments and changes of location, terminated its labors at Kingston on Sunday evening, April 20, 1777, when the new constitution drafted by John Jay was adopted with but one dissenting vote. It was not submitted to the people for ratification. New York was the 11th state to ratify the United States Constitution, on July 26, 1788.

Government Type

The Government of New York is the governmental structure of the State of New York as established by the New York State Constitution. It is composed of three branches: executive, legislative and judicial.
Executive branch is headed by the Governor of New York.
Legislative power is vested in bicameral parliament which consists of the New York State Senate and the New York State Assembly. The Assembly consists of 150 members; the Senate varies in its number of members, but currently has 63. The Legislature is empowered to make laws, subject to the Governor's power to veto a bill. However, the veto may be overridden by the Legislature if there is a two-thirds majority in favor of overriding in each House.
Judicial power comprises the Court of Appeals (the highest court of appeal), the Supreme Court and the county courts.

Economy

New York's gross state product in 2010 was $1.16 trillion, ranking third in size behind the larger states of California and Texas. New York's agricultural outputs are dairy products, cattle and other livestock, vegetables, nursery stock, and apples. Its industrial outputs are printing and publishing, scientific instruments, electric equipment, machinery, chemical products, and tourism. Sand, gravel, asphalt, and cement production are also significant industries in the state.
New York City's financial district, anchored by Wall Street in Lower Manhattan, has been called the world's leading financial center and is home to the New York Stock Exchange, the world's largest stock exchange by total market capitalization of its listed companies.
Silicon Alley, centered in New York City, has evolved into a metonym for the sphere encompassing the New York metropolitan region's high technology and entrepreneurship ecosystem; in the first half of 2014, New York State generated nearly $1.8 billion in venture capital investment. High tech industries including digital media, biotechnology, software development, game design, and other fields within information technology are growing, bolstered by New York City's position at the terminus of several transatlantic fiber optic trunk lines, its intellectual capital, as well as its growing outdoor wireless connectivity.
New York exports a wide variety of goods such as foodstuffs, commodities, minerals, computers and electronics, cut diamonds, and automobile parts. New York's largest imports are oil, gold, aluminum, natural gas, electricity, rough diamonds, and lumber.
New York is a major agricultural producer, ranking among the top five states for agricultural products such as dairy, apples, cherries, cabbage, potatoes, onions, and maple syrup. New York is the nation's third-largest grape-producing state, and second-largest wine producer by volume, behind California.

CORPORATE INFORMATION

Legal System

New York is a common law state.
The Consolidated Laws form the general statutory law.
LLCs and business corporations are regulated by Limited Liability Company Law and Business Corporations Law accordingly.

Types of Entity

The principal forms of business organization in New York are:

  • Business Corporation;
  • Not-for-Profit Corporation;
  • Limited Liability Company;
  • General Partnership;
  • Limited Partnership;
  • Sole Proprietorship

One of the most common structures is the limited liability company.

REGISTRATION

Company Name

There is a range of requirements to the name of limited liability company in New York:

  1. A company name shall contain the words "Limited Liability Company'' or the abbreviation "L.L.C.'' or the designation "LLC'';
  2. shall be such as to distinguish it from the existing names;
  3. shall not contain the following phrases or any abbreviation or derivative thereof: board of trade, state police, chamber of commerce, state trooper, community renewal, tenant relocation, corporation, urban development, incorporated, urban relocation, partnership;
  4. shall not contain the following words, or any abbreviation or derivative thereof: acceptance, guaranty, annuity, indemnity, assurance, insurance, attorney, investment, bank, lawyer, benefit, loan, bond, mortgage, casualty, savings, doctor, surety, endowment, title, fidelity, trust, finance, underwriter unless the approval of the superintendent of banks or the superintendent of insurance, as appropriate, is attached to the articles of organization or unless the word "doctor" or "lawyer" or an abbreviation or derivative thereof is used in a context that clearly denotes a purpose other than the practice of law or medicine;
  5. shall not, unless the approval of the state department of social services is attached to the articles of organization or application for authority, contain the word "blind" or "handicapped." Such approval shall be granted by the state department of social services if in its opinion the word "blind" or "handicapped" as used in the limited liability company's proposed name will not tend to mislead or confuse the public into believing that the limited liability company is organized for charitable or nonprofit purposes related to the blind or the handicapped;
  6. shall not, unless the approval of the attorney general is attached to the articles of organization or application for authority, contain the word "exchange" or any abbreviation or derivative thereof. Such approval shall not be granted by the attorney general if in his or her opinion the use of the word "exchange" in the limited liability company's proposed name would falsely imply that the limited liability company conducts its business at a place where trade is carried on in securities or commodities by brokers, dealers or merchants;
  7. shall not contain the following terms: "school," "education," "elementary," "secondary," "kindergarten," "prekindergarten," "preschool," "nursery school," "museum," "history," "historical," "historical society," "arboretum," "library," "college," "university" or other term restricted by section 224 of the education law; "conservatory," "academy," or "institute" or any abbreviation or derivative of such terms, shall have endorsed thereon or annexed thereto the consent of the commissioner of education.

Registration of LLC

The following steps are required to incorporate an LLC in New York:

1. Reserve the company's business name (optional), file the company's articles of organization and adopt the company's operating agreement – less than 1 day (online procedure)
The company founders may reserve the name of the company with the New York State Department of State Division of Corporations prior to filing the company's articles of organization. To reserve a name, the founders should file an application for Reservation of Name and pay a fee of USD 20. The application holds the name for 60 days and may be extended twice for additional periods of 60 days. The fee to extend the reservation of name is also USD 20.
The founders must file the company's articles of organization with the New York Department of State Division of Corporations. Forms can be purchased at a legal supply store or downloaded from the department’s website. The application processing time is about seven business days. However, optional expedited processing is available according to the following fee schedule:

  • 2-hour turnaround: USD 150 (additional fee)
  • Same-day service: USD 75 (additional fee)
  • 24-hour turnaround: USD 25 (additional fee)

New York State requires an LLC to have a written operating agreement but such agreement does not have to be filed with the state. The business members may enter into an operating agreement before, at the time of, or within 90 days after the filing of the articles of organization. Regardless of when such an agreement was entered into, it may be effective upon the formation of the LLC or at a later date specified in the operating agreement (provided, however, that under no circumstances shall an operating agreement become effective prior to the formation of such company).

2. Apply for federal identification number (EIN) for tax and employer purposes – less than 1 day (online procedure)
The company needs to apply for a federal Employer Identification Number ("EIN"), which is used for tax and employer purposes. Founders must file IRS Form SS-4 (available from the US Internal Revenue Service).
It is possible to apply online (processing time: immediate), by telephone (processing time: immediate), by fax (processing time: 4 business days), or by mail (processing time: 4 weeks). If applicants apply online, they do not need fill out IRS Form SS-4.

3. Register to collect state sales tax – less than 1 day (online procedure)
Businesses that "sell taxable tangible personal property, perform taxable services, receive amusement charges, or operate a hotel or motel, and restaurants, taverns, or other establishments that sell food and drink" must register as a sales tax vendor and obtain a Certificate of Authority, as well as those businesses that buy and sell for resale (for example, a wholesale distributor).
To register, the founders must file Form DTF-17 or register online at the website of the New York State Department of Taxation and Finance. After the company has registered, it generally must file quarterly sales and use tax returns regardless of whether it has started or done any business.

4. Register as an employer with the Unemployment Insurance Division at the State Labor Department – less than 1 day (online procedure)
Founders must register as an employer by completing Form NYS-100 to determine whether or not the company is liable under the New York State Unemployment Insurance Law. If the company is determined liable, the Department of Labor will send the company quarterly combined withholding, wage reporting and unemployment insurance returns for reporting wages paid to the company's employees. General business employers may register online at the New York State Department of Labor website or by completing Form NYS-100 and submitting it by mail or fax.

5. Arrange for workers' compensation and disability insurance – less than 1 day (online procedure)
As New York employers, the LLC founders must obtain and maintain workers’ compensation insurance and disability insurance for its employees by purchasing a workers’ compensation insurance policy and a disability benefits insurance policy from an authorized private insurance carrier or through the NYS Insurance Fund (or by self-insurance for workers' compensation).
The company’s federal Employer Identification Number (""EIN"") is the company’s primary identification with respect to communications with the Workers’ Compensation Board or by becoming a member of a group self-insurer authorized by the board. The company must give its EIN to its insurance carrier when obtaining or maintaining its workers’ compensation or disability coverage. Workers’ compensation insurance floor is calculated using each employee’s risk classification, salary, and total payroll.

6. Arrange for publication and submit certificate and affidavits of publication – 1 day
Section 206 of the New York State Limited Liability Company Law requires that within 120 days (after the effectiveness of the initial articles of organization), a limited liability company (LLC) must publish in two newspapers a copy of the Articles of Organization or a notice related to the formation of the LLC once a week for six successive weeks. The newspapers must be designated by the county clerk of the county in which the office of the LLC is located, as stated in the Articles of Organization.
The State of New York website has a directory of all New York county websites (http://www.nysegov.com/citguide.cfm?context=citguide&content=munibycounty1), which entrepreneurs can use as a reference to find their relevant county for publishing. The cost of notice of publication varies by county.
After publication, the printer or publisher of each newspaper will provide the entrepreneur with a Certificate of Publication, with the affidavits of publication of the newspapers attached. It must be submitted to the New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231. The fee for filing the Certificate of Publication is USD 50.

Access to Company Information

The records of the Division of Corporations may be searched on its site. You may search the records of the Division of Corporations to obtain information on corporations, limited liability companies, limited partnerships, and limited liability partnerships. Information available includes the following:

  1. current entity name;
  2. date of organization;
  3. jurisdiction, if other than New York State;
  4. county location;
  5. service of process address;
  6. registered agent, if any; and
  7. the current status of the entity.

Information on business corporations may also include the name and address of the chief executive officer and the principal business location. The information available through the site is updated daily.
The Department of State does not require or maintain information regarding the names and addresses of officers or directors of corporations, the members or managers of a limited liability company, the limited partners of a limited partnership or the partners in a limited liability partnership. These records are internal records maintained by the corporation, limited liability company, limited partnership or limited liability partnership.

Local Registered Office and Registered Agent

Each domestic limited liability company shall maintain a registered office in the US.
Each domestic limited liability company shall maintain the following records, which may, but need not, be maintained in this state:

  1. if the limited liability company is managed by a manager or managers, a current list of the full name set forth in alphabetical order and last known mailing address of each such manager;
  2. a current list of the full name set forth in alphabetical order and last known mailing address of each member together with the contribution and the share of profits and losses of each member or information from which such share can be readily derived;
  3. a copy of the articles of organization and all amendments thereto or restatements thereof, together with executed copies of any powers of attorney pursuant to which any certificate or amendment has been executed;
  4. a copy of the operating agreement, any amendments thereto and any amended and restated operating agreement; and
  5. a copy of the limited liability company's federal, state and local income tax or information returns and reports, if any, for the three most recent fiscal years.

A limited liability company may maintain its records in other than a written form if such form is capable of conversion into written form within a reasonable time.

The secretary of state shall be the agent of every domestic limited liability company that has filed with the department of state articles of organization making such designation.
Any designated post office address to which the secretary of state shall mail a copy of process served upon him or her as agent of a domestic limited liability company shall continue until the filing of a certificate directing the mailing to a different post office address.
In addition to the designation of the secretary of state, each domestic limited liability company may designate a registered agent upon whom process against the limited liability company may be served. The agent must be either:

  • a natural person who is a resident of this state or has a business address in this state;
  • a domestic limited liability company or an authorized foreign limited liability company; or
  • a domestic corporation or a foreign corporation authorized to do business in this state.

The registered agent of a limited liability company may resign as such agent. The registered agent shall file a certificate with the department of state entitled "Certificate of resignation of registered agent of... (name of limited liability company) under subdivision (d) of section three hundred two of the Limited Liability Company Law" and executed by such registered agent.
The designation of a registered agent shall terminate thirty days after the filing with the department of state of the certificate of resignation. A certificate designating a new registered agent may be delivered to the department of state by the limited liability company within the thirty days or thereafter.

Seal

New York State law does not require a corporation to have a seal.

Redomicile

The redomiciliation of companies to or from New York is not permitted.

COMPANY STRUCTURE

Managers

There is no statutory requirement for a manager an LLC. LLC can be managed by the members.
Management of LLC can be governed by its member(s) or by elected manager(s). If a limited liability company operating agreement states that management of the limited liability company is vested in a manager or managers, a minimum one manager is required.
Managers do not need to be members of the limited liability company. Residents of any country may become managers of New York LLC.

Secretary

There is no statutory requirement for a secretary in New York.

Members

An LLC must have a minimum of one member at any time. Members may be either a natural person or a corporate entity. There are no residency requirements.
Except as provided in the operating agreement, a limited liability company shall hold meetings of members annually. Meetings of members may be held at a place, either within or outside this state, as may be fixed by or in accordance with the operating agreement, or if not so fixed, at the office of the limited liability company. Except as provided in the operating agreement, members of a limited liability company may participate in a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Such participation shall constitute presence in person at the meeting.

Beneficiary

Beneficiaries’ details do not appear on a public profile. Generally, service providers including firms specializing in company formation, trust managers, lawyers, and accountants, keep beneficiaries’ information in strict confidentiality.

Share Capital and Shares

There is no minimum capital required to form a New York LLC.
Capital contributions to the LLC may be made either in cash, goods, services or know-how.

TAXATION

New York City Corporate Taxes

A New York City corporation pays federal income tax (currently at 21% rate), state income tax (with a basic rate of 6.5%), and city income tax (with a basic rate of 8.85%).
In addition, there are capital taxes, minimum taxes, etc.

Personal Income Tax

US citizens and residents are taxed on their worldwide income, non-residents are taxed on US-source income.
Income tax is levied at the federal level, the level of states and some municipalities.
Federal tax is payable on a progressive scale:
  • Income up to USD 9,950 – 10%
  • Income from USD 9,951 to 40,525 – 12%
  • Income from USD 40,526 to 86,375 – 22%
  • Income from USD 86,376 to 164,925 – 24%
  • Income from USD 164,926 to 209,425 – 32%
  • Income from USD 209,426 to 523,600 – 35%
  • Income over USD 523,600 – 37%

There is an alternative minimum tax and a targeted Medicare tax.
Most states and some municipalities also levy income tax, although some states don’t (for example, Florida). Some states levy income tax at a flat rate and others have a progressive scale. The rates and income levels to which they apply vary greatly.
Capital gains from the sale of assets held for at least 12 months are taxed at the federal level at reduced rates: the maximum rate is 20% (President Biden promises to significantly increase the rate for the highest income levels). Dividends are included in the ordinary taxable income. However, if certain requirements are met, they are taxed at the rates applicable to capital gains. There is usually also capital gains taxation at the state level.

Corporate Income Tax

US companies are taxed on their worldwide income, foreign companies are taxed on US-source income.
The federal corporate income tax rate is 21% (President Biden plans to raise the rate to 28%). It applies to both ordinary income and capital gains. 50 to 65% of dividends from US companies are tax exempt depending on the size of the shareholding. Corporations may be exempted from corporate income tax on dividends from foreign companies in the case of at least 10% shareholding, the holding period of more than a year and when meeting certain other conditions.
Corporate income tax is also levied at the state and municipal levels. State rates range from 1% to 12%, some states have no such tax.

CFC Rules

A controlled foreign company is a foreign company in which the US shareholders own directly or indirectly more than 50% (US shareholders are those with at least 10% ownership interest).
The CFC’s undistributed profit is included in the taxable income of the US shareholders.
This income includes passive income as defined by law.
There are a number of exceptions.
The taxable income also includes income that does not qualify as “passive” income, but exceeds a 10% return on the value of tangible assets of a foreign company (GILTI). Such income is taxed at lower effective corporate tax rates.

Withholding Tax

Withholding tax on dividends, interest and royalties is levied at the rate of 30%. Certain types of interest are exempt from withholding tax.
The tax may be withheld on certain other types of income.
The tax rates can be reduced under double tax treaties (DTT).

Sales Tax

Sales and use taxes are not levied at the federal level.
However, such taxes are levied by most states as well as municipalities.
The tax rates vary, usually ranging from 2.9% to 7.25%; the rules vary too.
The tax usually applies to retail sales, certain services, and some digital products.

Social Security Contributions

Social security contributions are paid by both the employer and the employee at the rate of 6.2% on employment remuneration not exceeding USD 142,800.
Medicare insurance rate is 1.45% for the employer and the same amount for the employee.
An additional Medicare insurance premium is withheld from the employee's salary at the rate of 0.9% for salaries over USD 200,000.
Employers also pay an unemployment insurance premium at the rate of 6% on the first USD 7,000 of the employment remuneration (however, the rate can be reduced to as little as 0.6% if such payments are also made at the state level).
Social security contributions can also be levied at the state level.

Inheritance and Gift Taxes

Inheritance tax is levied at the federal level at progressive rates, with a maximum rate of 40%.
The non-taxable amount is USD 11,700,000, the amount is indexed annually.
Inheritance tax is also levied at the state level.
There is also a gift tax.

Property Taxes

Most states and municipalities levy taxes on real estate.
Many states also levy taxes on commercial movable property.

Stamp Duty

Stamp duties are usually imposed by states and municipalities on real estate transactions.

Double Tax Agreements

The USA have exchange of information relationships with 88 jurisdictions through:
  • 60 DTC: Australia, Austria, Bangladesh, Barbados, Belgium, Bulgaria, Canada, Chile, China, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Korea (Republic of), Latvia, Lithuania, Luxembourg, Malta, Mexico, Morocco, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Kingdom, Venezuela, Viet nam.
  • 34 TIEAs: Antigua and Barbuda, Argentina, Aruba, Bahamas, Barbados, Bermuda, Brazil, Cayman Islands, Colombia, Costa Rica, Curaçao, Dominica, Dominican Republic, Gibraltar, Grenada, Guernsey, Guyana, Honduras, Isle of Man, Jamaica, Jersey, Liechtenstein, Marshall Islands, Mauritius, Mexico, Monaco, Netherlands Antilles, Panama, Peru, Saint Lucia, Sint Maarten, Trinidad and Tobago, Virgin Islands (British).

Exchange Control

There are generally no restrictions on foreign exchange transactions.

ACCOUNTS

Financial Statements

There is no requirement to prepare and file financial statements for Delaware corporations.

Audit

There is no audit requirement for Delaware corporations.

Annual Report

All corporations incorporated in the State of Delaware are required to file an Annual Report and to pay a franchise tax. Exempt domestic corporations do not pay a tax but must file an Annual Report. The Annual Report filing fee for all other domestic corporations is $50.00 plus taxes due upon filing of the Annual Report. Taxes and Annual Reports are to be received no later than March 1st of each year. The minimum tax is $175.00 with a maximum tax of $180,000.00.
Taxpayers owing $5,000.00 or more pay estimated taxes in quarterly installments with 40% due June 1, 20% due by September 1, 20% due by December 1, and the remainder due March 1. The penalty for not filing a completed Annual Report on or before March 1st is $125. Interest at 1.5% per month is applied to any unpaid tax balance.
Notification of Annual Report and Franchise Taxes due are sent to all Delaware Registered Agents in December of each year.

Tax Returns

The tax year coincides with the financial year and can be set at the choice of the company.
Corporate income tax returns are normally filed by the 15th day of the fourth month following the tax year-end (by 15 April if the financial year coincides with the calendar year), with possibility of extension.
Advance payments are made quarterly. The final tax payment is due by the tax return filing deadline.

International law relations

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Party to the Hague Convention (Apostille) Legal system Double tax treaties network OECD member Offshore/onshore status according to the RF laws
Yes common law 60 Yes No

Public authorities and legal acts

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List of laws and regulations
Act name Scope of law
New York Limited Liability Company Law limited liability company
US Internal Revenue Code taxation in the US
Tax treaties entered Australia, Austria, Bangladesh, Barbados, Belgium, Bulgaria, Canada, Chile, China, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Korea (Republic of), Latvia, Lithuania, Luxembourg, Malta, Mexico, Morocco, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Kingdom, Venezuela, Viet nam
Tax Exchange Information Agreement (TEIA) Antigua and Barbuda, Argentina, Aruba, Bahamas, Barbados, Bermuda, Brazil, Cayman Islands, Colombia, Costa Rica, Curaçao, Dominica, Dominican Republic, Gibraltar, Grenada, Guernsey, Guyana, Honduras, Isle of Man, Jamaica, Jersey, Liechtenstein, Marshall Islands, Mauritius, Mexico, Monaco, Netherlands Antilles, Panama, Peru, Saint Lucia, Sint Maarten, Trinidad and Tobago, Virgin Islands (British)
List of state regulatory authorities
State of New York http://www.ny.gov/
New York Division of Corporations http://www.dos.ny.gov/corps/
New York State Department of Taxation and Finance http://www.tax.ny.gov/

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